The Art and Science of Business Design Part-2

The lack of a good business design process is the number one reason why most businesses fail today.  Almost everything else, like poor market, running out of capital, unexpected risks and poor sales, is just a symptom of this root problem.


  • Defining "Business Design"

For purposes of this discussion, let us consider the inner concentric circle of the vision pie below as the definition of a business design.  Therefore:


DEFINITION: A Business Design - The sum of the complete strategies for each of the business disciplines required to deliver a product or service to the market.

We can assume the tactics can be driven by, or fall out of, the strategies developed.  Certainly, this is best at any early stage of development.  This is a simple, straightforward definition and very useful for our purposes.  Note, however, that this definition does not mean the business design actually works, only that you have a design.  A...

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The Art and Science of Business Design Part-3

The lack of a good business design process is the number one reason why most businesses fail today.  Almost everything else, like poor market, running out of capital, unexpected risks and poor sales, is just a symptom of this root problem.

  • Where Do Entrepreneurs Go Wrong?

The sad fact is, most businesses should not be run as originally envisioned by the founders for two main reasons:

1)   You never, never, ever know enough when you found a business not to make many, many adjustments along the way, and

2)   It is highly unlikely the founder has exactly all the right experience for this new business across the many business disciplines needed.

With the many thousands of business models possible for any given product or service, expecting to pick the best purely based on one person's previous experience out of the gate is almost absurd.  Only if this business is tremendously simple and the founder has spent decades in that...

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The Art and Science of Business Design

The lack of a good business design process is the number one reason why most businesses fail today.  Almost everything else, like poor market, running out of capital, unexpected risks and poor sales, is just a symptom of this root problem.


  • Why Business Design Must ALWAYS Be The #1 Priority of Any New Venture?

Designing a business is more art than science because it is something that takes lots and lots of real-world experience.  Personally, I do not think you can learn it at any university, or by any amount of study, until after you have spent many years working in management to understand people and business well.  It would be like someone reading for ten years about painting, without ever picking up a brush, and then when they finally pick up a paintbrush to paint their first person or landscape; and expect to paint a masterpiece.  Pretty unlikely, huh?  We may be able to teach strategy in school, but even that is just a...

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Are Corporate Directors Becoming Obsolete?

When The Liabilities Exceed the
Benefits of Being a Director

By Peter Cohen

In the last week, some corporate directors have written checks out of their personal accounts to settle suits against the companies on whose boards they served.  Earlier this week, 10 former WorldCom directors paid a total of $54 million -- $18 million from their own pockets, representing 20% of their net worth.  Today announced that 18 Enron directors agreed to pay $168 million, 10 of them paid $13 million from their own pockets, to settle their portions of securities class action suits.  These events probably mark the beginning of a trend that will cost directors of other bankrupt companies more money.

While these directors no doubt made these payments to avert the risk of even higher ones, their decisions alter the cost/benefit analysis for current and potential corporate directors.  It is no longer enough to show up at quarterly meetings, enjoy the CEO’s hospitality, and collect...

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Advice From A Nobel Prize Winner On Human Capital Management

Advice From A Nobel Prize Winner On Human Capital Management

An Interview From The Line Zine e-Newsletter

Gary S. Becker, the winner of the Nobel Memorial Prize for Economic Science in 1992, is a Professor of Economics and Sociology at the University of Chicago and a Senior Fellow at the Hoover Institution and University. He is recognized for his expertise in human capital, the economics of the family, and economic analysis of crime, discrimination, and population.

Becker: I would start out with some obvious things that are still sometimes forgotten: the basic resource in any company is the people. Remember Bill Gates’ famous comment that if you took away the top thirty employees at Microsoft, it would be a pretty ordinary company. And what’s true for companies is true for nations as well. In the New Economy, the reliance on people hasn’t fallen, but has increased. We are much more a human capital-based economy than the economy was even thirty years ago.


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16 Deadly Business Sins Committed By Companies

 Reprinted from the Red Herring:

I don't republish a lot of content from other people, but this article is just too good not to pass on to my followers.  It's a great checklist to hold up against your company no matter where you are today, big or small.  So, I suggest you ask yourself these 16 questions, and even have your management team print this entire article out and check off the ones they think your company may be in danger of committing. 
Identifying just one of these deadly problems could save your company, or make or save you millions. Plugging just one of these weaknesses, or even turning it into a strength, could drastically change the course of your company.  There is deep wisdom and experience from hundreds of companies embedded here in a simple checklist, so don't miss this opportunity to avoid these 16 deadly sins. 

Although this is by no means a comprehensive list there are many classics here....

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Ten Myths and Realities of VC

VC P.S: Ten Myths
and Realities of VC

 By Lawrence Aragon

Bill Reichert's brother is a doctor. His father also was a doc. So were his grandfather and his great-great-grandfather. So how could it be that Mr. Reichert is sitting and talking about venture capital over a plate of bacon and eggs at the Peninsula Creamery coffee shop in downtown Palo Alto? As I join him in the high-cholesterol meal, I can almost see the family of physicians staring down, wagging their fingers. "I'm the first Reichert male not to be doctor," he says, munching on a piece of bacon. "We figure it was my other grandfather's genes that sent me on this path."

Not the path to the coffee shop. The entrepreneurial path. His mother's father, Robert McElroy, built two companies -- one that eventually became the multibillion-dollar American Hospital Supply. Following in granddad's footsteps, Mr. Reichert founded five companies of his own, including a software company while he was getting his...

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10 Keys To Copy That Sells

10 Keys To Copy That Sells!

By Alexandria K. Brown, "The E-zine Queen"

Whether you're selling a product or service, the 10 tips below are your keys to writing great copy that communicates and persuades ... to get results! These guidelines can apply to Web copy, e-mail, sales letters, brochures, direct mail, and more. As long as your goal is to elicit a reaction from your reader, you've come to the right place.

1. Be reader-centered, not writer-centered.

Many ads, brochures, and Websites talk endlessly on and on about how great their products and companies are. Hello? Customer, anyone? Think of your reader thinking, "What's in it for me?" If you can, talk with some of your current customers and ask them 1) why they chose you, and 2) what they get out of your product or service. TIP: To instantly make your copy more reader-focused, insert the word "you" often.

2. Focus on the benefits -- not just the features.

The fact that your product or service offers a lot of neat features is great,...

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The Twelve (Almost) *Sure-fire Secrets To Entrepreneurial Success

Venture capitalists are not known for their humility, so take note of the following confession:

Venture capitalists are chickens. Compared to entrepreneurs, they're spectators in the great game of small business hardball. They would no sooner personally guarantee a corporate bank loan than they would jump off the cliffs of Acapulco. Contrary to popular opinion, however, they are not totally worthless - they work long hours, sift through more garbage than a trash collector, and have to get used to disappointing 99 entrepreneurs for everyone they please. They are veteran roller coaster riders, but never get used to those big drops. They are, above all else, risk reducers - they prospect in the land of the commercially unfaceable, and try to differentiate the superstars from the merely enthusiastic. Most of them are pretty good at it, a result of lessons learned, mistakes made, and successes observed.

Over the past 29 years as a venture capitalist, I've screened thousands of...

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What Does A CEO Need To Know?

Why You Always Need An Experienced CEO Involved At Some Level

Would you walk into a legal trial without an experienced attorney to represent you? Would you let a new medical school graduate perform their first brain surgery on you alone? Of course not!? However, many entrepreneurs who start a company print “President” on the door and do just that. They tackle huge new problems without any experience as a CEO in one of the most complex, expensive, and risky things they will ever do! So they think they save money, but they often drive their risk up 1,000% and costs 10% to 100% or more!

Consultants are plentiful, the advice is easy to get, it can be free or VERY expensive, but is it from someone who has succeeded in the past doing exactly that job? Not just as a ‘consultant’ but with full responsibility for success? In this environment, mistakes can be fatal, so don’t make this mistake.

No wonder only 6 in 1,000,000 ideas will ever reach an IPO. Contrary...

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